An Oct. 22, 2001, memo from Treasury economic policy aide Kent Smetters to O'Neill said Moynihan backed a Social Security restructuring plan that would layer small personal investment accounts on top of the existing Social Security system rather than diverting taxes from the system. Under the Moynihan approach, individuals could contribute an additional 1 percent of their earnings into an investment account, which would then be matched by the federal government from general tax revenue.
That "add-on" approach has become mainstream policy for the Democratic Party, but it is a major departure from the approach Bush has embraced.
Moreover, "Moynihan has expressed a considerable amount of frustration that he is not being allowed to control the agenda and, in particular, that the White House and Commission Staff are controlling the agenda to a large extent," said the memo, posted on the Internet by O'Neill biographer Ron Suskind.
"Moynihan was always a believer in incrementalism," said Smetters, now at the University of Pennsylvania. "He believed that once people got used to ownership, used to the accounts, they would want more of a good thing."
Former representative Timothy J. Penny of Minnesota, another Democratic member of the commission, said the add-on approach was discussed but members understood that Bush wanted them to carve individual accounts out of existing Social Security taxes.
Besides, said University of Pennsylvania professor Olivia S. Mitchell, another Democrat on the commission, "Moynihan signed the report like everyone else," and two of the commission's three recommendations favored significant partial privatization.
Rep. Charles B. Rangel of New York, the ranking Democrat on the House Ways and Means Committee, said the administration's use of Clinton and Moynihan will have little impact on the debate anyway.
Clinton, he said, "has no public office, no legislative role in Social Security," he said. "Pat Moynihan has passed away"
"If you're talking about bipartisanship, you have to be talking to people who are alive and elected, who can reach across the aisle to you," Rangel said.
